The Journal News from White Plains, New York on June 24, 2000 · Page 24
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The Journal News from White Plains, New York · Page 24

White Plains, New York
Issue Date:
Saturday, June 24, 2000
Page 24
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2D Saturday, June 24, 2000 The Journal News r FROM PAGE ONE BRIEFLY Starwood completes sale of Desert Inn WHITE PLAINS - Starwood Hotels & Resorts Worldwide Inc., the world's largest hotel operator, completed its $270 million sale of the Desert Inn Hotel and Casino to Stephen A. Wynn, exiting the gaming industry. The sale to Wynn, former chairman and chief executive of Mirage Resorts Inc., allows Starwood to focus on its Sheraton and Westin hotel chains, the White Plains-based company said. Wynn had said to Nevada gambling regulators that he planned to close the Las Vegas resort by Sept. 30, eliminating 1,500 jobs, and build a hotel project on the site, said Marilyn Epling, executive secretary to the Nevada Gaming Commission. AOL, Time Warner shareholders OK deal NEW YORK - Shareholders of America Online Inc. and Time Warner Inc. overwhelmingly approved the proposed combination of their two companies yesterday. The ambitious pairing must still be cleared by U.S. and European regulatory agencies. Shareholder approval had been widely expected but nonetheless symbolized a growing acceptance of the merger, which baffled investors when it was first announced Jan. 10. AOL stock declined sharply in the two months after the merger was made public, but has since stabilized. Dr. Koop extends Web company's life AUSTIN, Texas - Ailing Internet health site got a much-needed boost yesterday in the form of a $1.5 million loan and a separate 7-year commitment by namesake and co-founder former U.S. Surgeon General C. Everett Koop. Koop, 83, extended his agreement with the company on the same day it announced it had secured the loan with an unnamed merchant bank to fund short-term capital needs in advance of permanent financing. Analysts warned that the relatively small loan may not save the cash-strapped company. NYT signs agreement for new headquarters NEW YORK - The New York Times has signed a nonbinding agreement with state and city officials to build a new 40-story headquarters in the Times Square area, the company announced yesterday. The new offices would be on Eighth Avenue between 40th and 41st streets, across from the Port Authority Bus Terminal. The New York Times Company, from which Times Square took its name, has been headquartered at 229 W. 43rd St since 1913. If the project goes forward, the Times Co. plans to sell that building. Meat processor recalls ground beef WASHINGTON - IBP Inc., the nation's biggest beef processor, recalled 266,000 pounds of ground meat yesterday that may be contaminated with the deadly bacteria E. coli 0157:H7. The beef was distributed to wholesalers, distributors and grocery stores in 25 states, including New York. Five-pound packages distributed to retail stores for further processing bear code "D0881BH" and have the following three-line code near the seam of the package: "EST 245 J" on line one; "SELLFREEZE BY" on line two, and "MAY 31A" on line three. Tobacco executive testifies in Florida MIAMI Philip Morris Inc. never intended to lie to or mislead the American public about the health consequences of smoking, a top company executive testified yesterday in a landmark smokers' case. Ellen Merlo, one of eight senior vice presidents for the country's largest cigarette maker, rejected the jury's earlier verdict that found a pattern of fraud, lies, misrepresentations, conspiracy and concealment by the industry. "I don't believe that," Merlo said. "It was never our intention to lie or to mislead anyone." Philip Morris and four other tobacco companies are fighting payment of punitive damages to 300,000 to 700,000 sick Florida smokers in the first smokers' class-action case to go to trial. The Associated Press and Bloomberg News contributed to this report. DILBERT By Scott Adams f YEAH , I'rA HAVING THE WORST DATE J lEVER.y Superjumbo jet gets AIRBUS, from ID should take no longer on the A3XX than on today's current jumbos. In addition, Airbus is offering an exclusive entrance for passengers on the more exclusive upper deck, so they not need not mingle with the mob below. The company also said that longer runways would not be needed, as some have contended. Since its creation in 1972, Airbus has steadily eaten away at the market share of commercial jetliners, first targeting Lockheed Martin, McDonnell Douglas and now Boeing. The company is betting the A3XX will help it crack Boeing's monopoly on long-haul jets. Last year, Airbus surpassed Boeing in commercial airline orders with 476 to the American company's 391. The new European company will be 80 percent-owned by the European Aeronautics Defense and Space Co., formed last year from the merger of France's Aerospatiale Ma- Goodyear, Michelin teaming up on project that could eliminate spare tires THOMAS J. SHEERAN The Associated Press CLEVELAND The spare tire may face extinction if a new venture by rivals Goodyear Tire & Rubber Co. and The Michelin Group bears fruition. The companies said yesterday that the 50-50 project would focus on getting automakers to equip new cars with tires that work for a while after losing air pressure. The joint venture will be based in the Netherlands. Each company has already developed no-flat tires and will license their current technology to each other. They hope the next innovation, if accepted by consumers, will mean less chance of a blowout, driving farther after losing air pressure, no need for a spare and smaller tires that can allow for design enhancements, like larger brake systems. "Tire companies have been unable to offer a solution" to the spare until now, said Goodyear chairman and chief executive Samir G. Gibara. Once developed, a standardized no-flat tire could be produced with existing manufacturing equipment without a substantial additional investment, Gibara said. He said it was too early to say how the project would affect profits or New Conseco The Associated Press CARMEL, IND. - The interim chairman of Conseco Inc. told a largely disgruntled group of shareholders yesterday that the troubled insurance company likely will choose a new top executive by the end of September, if not sooner. David Harkins, who took over as chairman and CEO on April 28 after the resignation of Conseco co-founder Steven Hilbert, also said he was encouraged by talks to sell the company's Achilles heel, its lending unit Conseco Finance. Harkins said it was hard to tell when a sale might take place. Conseco, which sells life and health insurance to middle-income households and senior citizens, was once the darling of Wall Street when its stock climbed with succeeding acquisitions of other insurers. It lost investor confidence two years ago, CALENDAR TOMORROW 1 p.m. AFRICAN AMERICAN MEN OF WESTCHESTERWESTCHESTER RESIDENTIAL OPPORTUNmES. A free, first-time home buyers workshop. Calvary Baptist Church, 188 Orawaupum St., White Plains. Information: AAMW at 949-9463 or WRO at 4284507. MONDAY 9 a.m. NEW YORK STATE SMALL BUSINESS DEVELOPMENT CENTER. Free counseling for small businesses. Mercy College, Dobbs Ferry and UHAT'S THAT ON THE GROUND? IT L00K5 INTERESTING. tra, Germany's DaimlerChrysler Aerospace and Spain's Casa. EADS said it believes there will be demand for 1,500 A3XX over the next two decades, and it intends to capture half that market. It said eight leading customers have already expressed interest in acquiring 52 planes in the A3XX family. Boeing has decided to modernize its trustworthy 747 family of planes rather than build its own mammoth jet. A proposed "stretch" version of the 747-400 would add about 100 seats. A decision on whether to proceed with the stretch at an estimated cost of $3 billion to $4 billion will depend on interest from the airlines and airplane leasing companies, said John Dern, a Boeing spokesman. The Airbus decision to go ahead with the $12 billion project promises to intensify competition between the two rivals with their opposing strategies for the future. But Dern said Airbus still has a long way to go "before they begin cutting metal." sales. Akron-based Goodyear claims 20 percent of the worldwide tire market with Michelin, based in Clermont-Ferrand, France, at 19 percent. The trade journal Tire Business ranked Goodyear as No. 2 with a 17 percent share in 1998 before it acquired Dun-lop. Dean Mueller, co-owner of a chain of 15 tire stores in the Cleveland area, said the Goodyear-Michelin idea has big potential. "The biggest single fear any consumer has when driving a car is getting a flat in the middle of the night in winter in Cleveland," he said. David Garrity, an analyst who follows Goodyear for Dresdner Klein-wort Benson in New York, said the venture would save both companies money. "The near-term benefit is you don't have two companies spending heavily to develop rival standards," he said. And unlike incompatible systems in early production of videocassette recorders, "We don't have that problem any more" with flat-run tires, he said, because the industry leaders would set the global standard. Through a television link from New York and Paris, Gibara and Edouard Michelin, chairman of CEO likely by The Associated Press David Harkins, interim chairman of Conseco Inc., center, goes into the shareholders meeting in Carmel, Ind., yesterday. however, with the $6 billion acquisition of Green Tree Financial Corp., a St. Paul, Minn.-based lender to buyers of manufactured homes. The stock price has lost roughly 90 percent of its value since then, accelerated by the March 31 an White Plains campuses. Information: Christina Cashin at 674-7485. 9:30 a.m. SERVICE CORPS OF RETIRED EXECUTIVES. Free business counseling. New York State Department of Labor offices, 120 Blooming-dale Road, White Plains. Information: 948-3907. 7 p.m. BEDFORD TOASTMASTERS. Bedford Hills Community House, Main Street. Information: Greg Riley at 666-9452 7:30 p.m. COMMUNITY SUPPORT FOR EMPLOYMENT TRANSITION (COMSET). Larchmont Avenue i u e j ( NOT ScA I good. J M V..,., . , If a 1 V lie dik clearance "It's just one step in the process. This is something that has been expected for some time," he said in Seattle. "Now they've got to get customers to stand up and say they're interested in buying this airplane." Boeing estimates the market for an A3XX-size plane is much smaller, about 360 aircraft, because, "most passengers, whenever possible, want to avoid congested hubs and want more point-to-point service" that can be handled with existing jetliners, Dern said. The A3XX announcement was accompanied by restructuring of EADS, whose initial offering of up to 166.5 million shares is scheduled to appear on the Frankfurt and Paris stock exchanges July 10. British Aerospace Systems, the fourth partner in Airbus Industrie, will hold the remaining 20 percent of Airbus Integrated Company and has an option to sell this stake to EADS after three years. The conversion of Airbus into a corporation is expected to generate annual savings of $330 million by 2004. Michelin, said the companies hope to convince automakers to install such tires as original equipment. While sharing the technology, the companies will continue to compete for business, the chairmen said. The joint venture, which will be based in the Netherlands, will capitalize on Michelin's newest tire in development, which will go 125 miles at 55 mph after losing air. "We knew we had a winner," Michelin said. Goodyear's current no-flat tires have been used on new Chevrolet Corvettes and Plymouth Prowlers. Michelin's Zero Pressure tires have been an option on new Lincolns. It could take two to four years for automakers to incorporate the new technology into new models, the chairmen said. Ford Motor Co. spokeswoman Cheryl Eberwein said the idea has merit. "We think our customers will be interested in these technologies, but we can't predict how quickly they will be accepted by customers, so we can't predict how quickly we will move them into our vehicles," she said. Goodyear employs about 105,000 people worldwide, while Michelin employs about 127,000. summer's end nouncement that the company was trying to sell Conseco Finance, the unit Green Tree became part of. The stock ended regular trading on yesterday at $5,688, down 18.7 cents, or 3 percent, on the New York Stock Exchange. The annual meeting has attracted only about 75 shareholders in recent years, but about 450 showed up yesterday, spilling out of the main auditorium into conference rooms and even a lobby to watch the proceedings on closed-circuit television feeds. Conseco president and chief operating officer Thomas Kilian presented a plan to boost profits, saying the company was working to reduce both operating expenses and corporate expenses. He said Conseco hoped to improve the performance of its major medical and long-term care insurance businesses with steps including rate increases to policy holders. Church. Information: Daniel Reilly at 6363542. TUESDAY 7 p.m. ROCKMUG MACINTOSH USER GROUP. New City Public Library. Information: Dick Price at 354-6222. The business calendar is compiled by Joe Walsh Information should be submitted to him at The Journal News, Business News Department, 1 Gannett Drive, White Plains, NY 10604 or you may fax him at 914-694-5018. House backs money for U.S. tobacco lawsuit TOBACCO, from ID split. Heavy lobbying pitted cigarette makers against health, veterans, senior citizens and other groups. Similar lines were drawn on the House floor. Rep. Howard Coble, R-N.C, said cigarette opponents were "determined to drive the final death nail into the coffin of tobacco." But Rep. Greg Ganske, R-Iowa, a physician, asked, "Are you for big tobacco, or are you for the American taxpayer who has paid the bill for tobacco for too long?" Yesterday's vote capped a topsyturvy week that began when the House voted 207-197 on Monday against letting the Justice Department accept $4 million from veterans' health programs to pay for the litigation. A day later, the House voted by voice to let the money come instead from the Department of Veterans Affairs' administrative budget. The pivotal difference was 25 Republicans, mostly from the north and California, who voted "no" on Monday but "yes" yesterday. "It was taking out of veterans" in Monday's vote, Rep. Ralph Regula, R-Ohio, one of the switchers, said in an interview. "And this vote wasn't." Yesterday's roll call was one of the few failures the tobacco industry has suffered on Capitol Hill in recent years. Tobacco allies scuttled the Senate's 1998 effort to levy $516 billion in new taxes on the industry and use the money for health and anti-smoking programs. They have also resisted recent Clinton proposals to boost the cigarette tax, and stymied efforts Investment group buying Johns Manville for $2.4B The Associated Press DENVER Building-product manufacturer Johns Manville Corp. has agreed to a $2.4 billion buyout offer from an investment group. Under the deal announced yesterday, the investment group led by affiliates of Hicks, Muse, Tate & Furst Inc. and Bear Stearns Merchant Banking would pay $15,625 in cash and securities for each of Manville's 155 million shares. That represents a premium of 27 percent over Manville's closing price Thursday of $12,313 a share on the New York Stock Exchange. Yesterday, Johns Manville rose 93.7 cents, or 7.6 percent, to close at $13.25 a share on the New York Stock Exchange. The buyers are also assuming liabilities and expenses that would boost the total value of the deal to about $3 billion. The deal is expected to close before the end of the year pending regulatory, financing and shareholder approval. The Manville Personal Injury Settlement Trust, created to finance settlement of litigation over the company's asbestos products, would retain a stake in the new company, as would management including chairman and chief executive Jerry Henry. The 142-year-old Denver company American Home to help market blood pressure drug! JOE RICHTER Bloomberg News MADISON, N J. American Home Products Corp. said it will help with U.S. marketing of King Pharmaceuticals Inc.'s Altace high blood pressure drug, an older pill that doctors are prescribing more because of new research. King will pay American Home, one of the largest U.S. drugmakers, an annual fee based on Altace sales. American Home bought $75 million in King stock and paid King $25 million. American Home will pay King another $50 million if U.S. regulators approve additional claims for the drug, which won U.S. approval in 1991. Annual Altace sales could rise to more than $500 million by 2004 from $122 million in 1999 as the addition of American Home's sales force helps make more doctors aware of a key study that shows benefits for Altace, said Timothy Anderson, an analyst with Prudential Vector Healthcare. American Home could add about 1,000 sales people to the force of about 300 that King now uses to promote Altace, he said. "You have a lot more warm bodies out there talking about Altace," said Anderson, who is also a medical doctor. "It comes down to marketing muscle. There are physicians in the community who don't always keep up with the literature." Shares of King, based in Bristol, Tenn., rose $1.6875 to close at $43,125 to let the federal Food and Drug Administration regulate tobacco. ; : Following the $246 billion settlement the states reached with tobacco companies in 1998, the J ustice Department filed its own lawsuit last September. The legal action is expected to cost the department $40 million this year and next alone. To help defray it, the Clinton administration would let the Departments of Defense, Veterans Affairs, and Health and Human Services each contribute $4 million to Justice next year. The administration cited a 1995 law that lets the Justice Department accept reimbursements from other agencies involved in lawsuits. But tobacco opponents put language in a measure financing the Departments of Commerce, Justice and State stating that the law limited such transfers to suits when the government is defending itself. "The question here is whether the Justice Department violated the law itself," said Rep. Harold Rogers, R-Ky., chief author of the language. "The question here is the merits of the morality at the Justice Department." In yesterday's vote, the House approved an amendment by Rep. Henry Waxman, D-Calif., and several others exempting suits the government filed before last Jan. 1. It affected only the tobacco suit, Waxman said. He said he designed his amendment so tobacco supporters could not argue that the statute might be used to finance lawsuits against gambling, gun makers or other industries. had sought protection under Chapter 11 of the federal bankruptcy laws in 1982 when it was faced with suits from people sickened by exposure to asbestos. It emerged from bankruptcy protection in 1988. ' ' Henry joined the company in 1996, and has agreed to postpone his previously announced plans to retire. - Manville sales reached $2.2 billion last year, up from $1.5 billion in 1596, "The company has thrived in refeot years under a strong management team, a great acquisition track recbjrd, impressive productivity and a strong global brand," said Thomas O. Hicks, chairman and CEO of Hicks Muse.'. The settlement trust, which hold's about 76 percent of Johns ManvilCe common stock, has agreed to support the merger subject to certain con'di? tions. Following the merger, the trus would hold about 8.5 percent of the company's common stock. Johns Manville has also agreed to pay the trust $90 million to settle the company's obligation for future income taxes of the trust. Robert A. Falise, chairman and managing trustee of the settlemnet trust, said the deal is a "major additional step in further diversifying and monetizing the Trust's assets." ; Johns Manville employs about 9,700 worldwide. on the New York Stock Exchange! They more than tripled in the past year as investors learned about the results of the Altace study, known as the Hope study. . The New England Journal of Med1 icine, one of the most widely read publications for U.S. doctors, thought the research so compelling that it published Hope results on its Web site in November rather than waiting for a scheduled publication in January. , Part of this 9,500-patient study was stopped ahead of schedule in April 1999 when it became clear that pa tients getting ramipril, the chemical name for Altace, were less likely to die or suffer heart attacks and deaths than other who received a placebo or dummy medicine. i iW-'fi Tlred tos'": : ? bigb commissions? irhcn consider the account which ha changed the way you will want to invest., a PASSPORT Account will provide you witlu No Conflict of Inter rt with row broker.- Eaay to understand, comprcheneive reporttnf, Flexibility to move among Investment. , Keaaonable fees, NOT conventional commbaiona. 111 Uy for your Deport RAYMOND JAMES oanewworUoflnrtMlnal zZZ Thomas A mi Ik Manager 20 S. Main St.. 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